Omnichain Settlement
Enables greater speed, low transaction costs, and features higher capacity for better interoperability and decentralized user experience.
Settlement Chain
Within the yBridge system, a crucial component is the settlement chain. This can be envisaged as a digital ledger, documenting the transaction details of users. Furthermore, this layer is vital within the entire ecosystem for establishing liquidity across each chain; it listens to and records the activities of all peripheral chains supported by yBridge.
Firstly, a settlement is defined as a payment or transaction that is conclusive and executed. In the cryptocurrency sector, a transaction is only considered settled once it is recorded on the blockchain, ensuring the irreversibility of the exchanged cryptocurrencies.
Consequently, we have established the yBridge settlement chain, which supports EVM-compatible smart contracts, thereby enabling code execution in an environment akin to EVMs. This eliminates the need for yBridge to develop solutions from the ground up. Additionally, this approach enhances transaction speed, increases capacity, and reduces gas fees
And on the settlement chain, we will deploy a smart contract to record the pool token balance on each chain and also keep track of the liquidity balance of each user, which makes the settlement chain an arbitrator. The following flow chart demonstrates how different chains interact with the settlement chain and users.
Furthermore, on the settlement chain, a smart contract will be deployed to monitor the pool token balance on each chain and track each user's liquidity balance, positioning the settlement chain as a mediator. The subsequent flowchart illustrates the interaction between different chains and the settlement chain, along with user involvement.en balance on each chain and also keep track of the liquidity balance of each user, which makes the settlement chain an arbitrator.
Validators
To smooth the process of decentralized transactions and to ensure the mechanism function normally, we have several validators set to keep information on each chain updated constantly. They are used to check the validity or syntactical correctness of a fragment of code or document. Not only will the validators help verify whether our web pages are correctly coded, but they are also furnished with a consensus algorithm to prevent malicious attacks, keeping the network security and efficiency up to standard 24/7. You can learn more about the details of consensus and validators at Consensus
Settlement Contract (yBridge)
Once we confirm the completion of a user's source chain transaction, the executor initiates a request on the settlement chain's contract. After our validators complete the verification, the executor, with the signature, is authorized to issue a transaction on the destination chain to fulfill the bridge request. Upon the transaction's completion on the destination chain, the executor returns to the contract on the settlement chain to settle the original request. This process ensures that all behaviors on the peripheral chains are accounted for and error-free.
Settlement Contract (yBridge Vault)
When users deposit yBridge-supported tokens (i.e. USDT or USDC) into a chain, they will receive xyUSDT/xyUSDC (obviously depending on what stablecoins they put into the pool) as proof of deposit or their shares. In contrast, as users withdraw the tokens from a chain, they will return xyUSDT/xyUSDC as their shares, as ➀ and ➂ in the following illustrations.
Validators will thus interact with the settlement contract to update the balance of the corresponding chain as well as that of users, as ➁ in the following illustration.
As time goes by, users' deposits will pay off. They may choose to withdraw their funds using xyUSD and get xyToken (&XY) in return, and that's where the settlement contract calculates or "settles" the corresponding quantity of reward distributed to users, as ➁ shown below.
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